INTRODUCTION

1. FAST-MOVING CONSUMER GOODS (FMCG)

A. PRE COVID BUSINESS SITUATION:

 Fast-moving consumer goods (FMCG) sector is India’s

fourth largest sector with household and personal care
accounting for 50 per cent of FMCG sales in India. Growing
awareness, easier access and changing lifestyles have been
the key growth drivers for the sector. The urban segment
(accounts for a revenue share of around 55 per cent) is the
largest contributor to the overall revenue generated by the
FMCG sector in India. However, in the last few years, the
FMCG market has grown at a faster pace in rural India
compared to urban India. Semi-urban and rural segments are
growing at a rapid pace and FMCG products account for 50
per cent of the total rural spending.

 Market Size
Rise in rural consumption will drive the FMCG market. It
contributes around 36 per cent to the overall FMCG
spending. FMCG urban segment witnessed growth rate of 8
per cent, whereas, rural segment grew at 5 per cent in the
quarter ended September 2019.

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  The sector had been seeing a slow-down since mid-2018,
with growth rates steadily declining for the past 15-18
months from the mid-teens to around half of that by Jan/Feb
2020.

B. POST COVID BUSINESS SITUATION:

 The coronavirus lockdown has forced FMCG companies to
step out of their comfort zones, as manpower shortage and
shutting down of stores has brought the traditional
distribution mechanism to a grinding halt.
 Seizing the opportunity offered by Covid, almost every
FMCG company launched its brands in the hygiene
categories of hand wash and sanitizer, adding to the clutter
in these categories that were otherwise small and niche.
 In July 2020, Mother Dairy forayed into bread segment as
part of its strategy to diversify business and announced its
target to more than double its revenue to Rs 25,000 crore
(US$ 3.55 million) in the next five years.
 The government's decision to allocate additional Rs 40,000
crore for MGNREGA scheme is another big positive which
would lead to creation of more jobs in the hinterland and
ease the distress of migrant workers returning home.